Argentina denies non-compliance to WTO regulations

Argentina has rejected a joint statement issued by 14 World Trade Organisation (WTO) members, asking it to remove the import restrictions it recently implemented, as “unjustified”.

The country maintained that the measures were compatible with WTO rules, and said that it had responded to these concerns in previous meetings, adding that its imports rose by 30% in 2011. Moreover, Argentina expressed concern about the threat to the use of legitimate policy tools by developing countries to promote development, especially during the current economic crisis, and said that developed countries were the ones restricting trade through the use of subsidies and tariff peaks.

The statement, signed by government representatives of Australia, the EU, Israel, Japan, South Korea, Mexico, New Zealand, Norway, Panama, Switzerland, Chinese Taipei, Thailand, Turkey and the US, outlines several “continuing and deepening concerns” over the “trade-restrictive measures” implemented by Argentina over the past few months.

In particular, the coalition raised the issue of the “lack of transparency in Argentina’s implementation and administration of its import licensing regime”, which it said “creates profound uncertainty both for exporters and potential exporters to Argentina, as well as for investors in Argentina”.

According to the alliance, many Argentinean importers have reported receiving phone calls from government officials asking them to agree to export goods of an equal or greater value in order to obtain import authorisations.

“The Ministry of Industry’s website is replete with press releases announcing these trade-balancing and domestic production arrangements. Argentina may claim that companies enter into these arrangements voluntarily, but many of the Members supporting this statement share concerns that it may be operating otherwise.

“We are not aware of any official directive or resolution setting out these trade-balancing or investment requirements. However, high level Argentine government officials have been quoted in the Argentine press as saying quite clearly that the purpose of these requirements is to improve its trade balance, by restricting imports and promoting exports,” the statement said.

Further WTO action considered

The 14 WTO members said Argentina’s import requirements, including the pre-registration, review and approval of every transaction implemented in February 2012, operated “as a de facto import restricting scheme on all products”, and asked the country to remove them. They added that if Argentina failed to terminate or justify the restrictions according to WTO rules, they “reserve their rights to pursue this matter further”.

US Ambassador Michael Punke said: “We are pleased to be able to join together in the hope that Argentina will see the seriousness with which this large group of members views Argentina’s import restrictions and requests that the restrictions be eliminated.”

He added: “Working together with our trading partners to address and resolve issues of mutual concern is what the WTO is all about.”

Brazilian pork exports to Argentina dropped by 77% in the first month after the implementation of the new import restrictions, compromising the two countries’ trade relationship and worrying representatives of the meat industry.

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